Here’s how to hack your IRA, take control of its investments, and keep your cash out of the reach of creditors and prying eyes. If you are concerned about the state of our country, or simply want to diversify your retirement funds abroad, move your IRA offshore.
This post originally appeared in LowTax.net
First, let me tell you that your retirement account is not confiscation proof. Your IRA may be seized by the Federal government or the Internal Revenue Service at any time. State homestead and asset protection laws do not apply. Also, depending on your State, some of your retirement account may be exposed to civil creditors.
Second, many experts believe that the offshore IRA hack will be outlawed sometime in 2015 as the first shot in the fight to nationalize personal savings. We don’t know if or when this will happen, but we do know how to protect against the possibility, however remote… get your account out of harm’s way.
- There is approximately $18 trillion in US retirement accounts and the national debt is $17 trillion and rising. Food for thought…
Ok, here’s how to hack any vested account, or an IRA from a previous employer. It works for traditional or ROTH IRAs, 401Ks, SEPs, SIMPLE, and most defined benefit accounts.
You take control of your retirement account and move it abroad by forming an offshore IRA LLC.
Step one is to transfer your account from your current custodian to one that allows for offshore investments.
Step two is forming an offshore LLC and opening bank and brokerage accounts. This part requires a professional to draft the operating documents and form a U.S. compliant offshore structure. In other words, that’s what I do.
Finally, the custodian invests your retirement money into this LLC. You now have offshore checkbook control over your account. You’re the signatory on the bank account and can invest in just about anything you like.
- Want to read the minutia and code sections that support the IRA hack? Here’s an analysis of the offshore IRA LLC tax structure.
And there’s more good news: you are not required to file any of the complex offshore company forms, or report the offshore account, to the IRS. Foreign accounts held by an IRA LLC are exempt from all offshore reporting requirements!
Now, it can’t always be rainbows and butterflies. You still must follow U.S. rules while offshore. But, these are pretty straightforward.
Most importantly, you need to avoid “self-dealing.” You are to treat the account just as a professional investment manager would by holding all transactions at arm’s length. Don’t borrow money from the account, don’t spend it on personal items, and don’t receive any benefit from the investments. For example, you may not buy a home and live in it, can’t buy art (because you will receive personal enjoyment from it hanging on your wall), and you may not borrow money from your IRA.
Next, IRAs are prohibited from investing in collectibles, life insurance, S corporations, and any business you own a majority stake in. You are also prohibited from buying gold coins of less than 99.9% purity.
That wasn’t so bad, was it? So long as you avoid self-dealing and follow the rules above, you are free to invest however you like.
For example, you might store gold bullion in an offshore vault, buy and manage foreign rental properties, diversify out of the dollar, or take on non-traditional investments like hardwoods.
And that’s the offshore IRA hack. For more information, feel free to contact me directly at firstname.lastname@example.org.